The mega-rich really aren’t like you and me. Well, at least when it comes to investing. They have access to all sorts of exotic asset classes and strategies that our measly portfolios could only dream of owning – at least that was the truth decades ago. Today, alternative strategies and esoteric asset classes are available with one-click access. Want to bet on spreads between volatility futures? There’s an ETF for that.
And one of the biggest asset classes making a splash in high-net-worth and institutional portfolios has been private equity.
The betting on private businesses and assets has grown considerably since its initial popularity among institutions. But it turns out the world of private equity could now be at our fingertips. The question is whether you want to take a bite of private businesses.
The Allure of Bigger Returns
To say that private equity investing has gone mainstream would be an understatement. According to a new survey and report by investment manager SEI, assets in private equity funds have grown at an astonishing 133% since 1995 and with a compound annual growth rate (CAGR) of around 28%. As of today, more than $4 trillion worth of investor funds now sits in various buyouts and PE investment vehicles. To put that in context, assets in mutual funds have only grown by about 10% annually since then.